SPHERE ENTERTAINMENT CO. REPORTS FISCAL 2025 FIRST QUARTER RESULTS
Sphere Entertainment reported Q1 FY2025 financial results with revenues of $227.9 million, up $109.9 million year-over-year. The company posted an operating loss of $117.6 million, increasing by $47.8 million. The Sphere segment generated revenues of $127.1 million, including $71.5 million from The Sphere Experience across 207 performances. MSG Networks segment reported revenues of $100.8 million, down 9% due to a 13% decrease in subscribers. Notable developments include plans for a second Sphere in Abu Dhabi, new partnerships with Verizon and DCT Abu Dhabi, and successful events including U2 concerts and UFC 306.
Sphere Entertainment ha riportato i risultati finanziari del primo trimestre dell'anno fiscale 2025, con ricavi di 227,9 milioni di dollari, in aumento di 109,9 milioni rispetto all'anno precedente. L'azienda ha registrato una perdita operativa di 117,6 milioni di dollari, in aumento di 47,8 milioni. Il segmento Sphere ha generato ricavi di 127,1 milioni di dollari, di cui 71,5 milioni da The Sphere Experience attraverso 207 performance. Il segmento MSG Networks ha riportato ricavi di 100,8 milioni di dollari, in calo del 9% a causa di una diminuzione del 13% degli abbonati. Sviluppi notevoli includono piani per una seconda Sphere ad Abu Dhabi, nuove partnership con Verizon e DCT Abu Dhabi, e eventi di successo tra cui concerti degli U2 e UFC 306.
Sphere Entertainment reportó los resultados financieros del primer trimestre del año fiscal 2025, con ingresos de 227.9 millones de dólares, un aumento de 109.9 millones en comparación con el año anterior. La compañía tuvo una pérdida operativa de 117.6 millones de dólares, lo que representa un aumento de 47.8 millones. El segmento Sphere generó ingresos de 127.1 millones de dólares, de los cuales 71.5 millones provienen de The Sphere Experience en 207 representaciones. El segmento MSG Networks reportó ingresos de 100.8 millones de dólares, una disminución del 9% debido a una baja del 13% en suscriptores. Entre los desarrollos notables se incluyen los planes para una segunda Sphere en Abu Dhabi, nuevas alianzas con Verizon y DCT Abu Dhabi, y eventos exitosos que incluyen conciertos de U2 y UFC 306.
스피어 엔터테인먼트는 2025 회계연도 1분기 재무 결과를 보고했으며, 매출은 2억 2,790만 달러로 전년 대비 1억 990만 달러 증가했습니다. 회사는 1억 1,760만 달러의 운영 손실을 기록하여 4,780만 달러 증가했습니다. 스피어 부문은 1억 2,710만 달러의 수익을 올렸으며, 이 중 7,150만 달러는 207회의 공연을 포함한 The Sphere Experience에서 발생했습니다. MSG 네트워크 부문은 1억 8,800만 달러의 수익을 보고했으며, 구독자 수가 13% 감소하여 9% 감소했습니다. 주목할 만한 발전에는 아부다비에 두 번째 스피어 계획, 베리존 및 DCT 아부다비와의 새로운 파트너십, 그리고 U2 콘서트 및 UFC 306과 같은 성공적인 이벤트가 포함됩니다.
Sphere Entertainment a rapporté les résultats financiers du premier trimestre de l'exercice 2025, avec des revenus de 227,9 millions de dollars, en hausse de 109,9 millions par rapport à l'année précédente. La société a affiché une perte opérationnelle de 117,6 millions de dollars, en augmentation de 47,8 millions. Le segment Sphere a généré des revenus de 127,1 millions de dollars, dont 71,5 millions proviennent de The Sphere Experience lors de 207 performances. Le segment MSG Networks a rapporté des revenus de 100,8 millions de dollars, en baisse de 9 % en raison d'une diminution de 13 % du nombre d'abonnés. Parmi les développements notables figurent des projets pour une seconde Sphere à Abou Dabi, de nouveaux partenariats avec Verizon et DCT Abou Dabi, ainsi que des événements réussis tels que des concerts de U2 et l'UFC 306.
Sphere Entertainment hat die finanziellen Ergebnisse des ersten Quartals des Geschäftsjahres 2025 berichtet, mit Einnahmen von 227,9 Millionen Dollar, was einem Anstieg von 109,9 Millionen im Vergleich zum Vorjahr entspricht. Das Unternehmen verzeichnete einen operativen Verlust von 117,6 Millionen Dollar, was einem Anstieg von 47,8 Millionen entspricht. Das Segment Sphere generierte Einnahmen von 127,1 Millionen Dollar, darunter 71,5 Millionen aus The Sphere Experience über 207 Aufführungen. Das Segment MSG Networks berichtete über Einnahmen von 100,8 Millionen Dollar, was einem Rückgang von 9% aufgrund eines Rückgangs der Abonnenten um 13% entspricht. Zu den bemerkenswerten Entwicklungen gehören Pläne für eine zweite Sphere in Abu Dhabi, neue Partnerschaften mit Verizon und DCT Abu Dhabi sowie erfolgreiche Veranstaltungen, einschließlich U2-Konzerte und UFC 306.
- Revenue increased 93% YoY to $227.9 million
- Sphere Experience generated $71.5 million from 207 performances
- Event-related revenues grew by $36.8 million
- Adjusted operating loss improved by $47.7 million
- Expansion plans confirmed for Abu Dhabi location
- Operating loss increased by $47.8 million to $117.6 million
- MSG Networks revenue declined 9% to $100.8 million
- MSG Networks subscriber base decreased by 13%
- MSG Networks' $829.1 million credit facilities matured with pending refinancing
- Sphere segment operating loss increased by $26.6 million
Insights
Q1 FY2025 shows significant operational progress for Sphere Entertainment, with total revenues increasing
Critical concerns emerge from MSG Networks' segment, showing a
The expansion plans into Abu Dhabi through a franchise model represent a significant growth opportunity, potentially creating a new revenue stream without substantial capital investment. The venue's diverse revenue mix from experiences, events and advertising demonstrates strong monetization potential. The successful hosting of UFC 306 as the highest-grossing event and extended Eagles residency indicate robust demand.
However, the declining MSG Networks subscriber base and debt situation could overshadow growth prospects. The successful execution of debt restructuring and the performance of the new Gotham Sports App will be key factors in determining the company's future trajectory.
Recent Sphere operating highlights include:
- In October, the Company and the Department of Culture and Tourism –
Abu Dhabi ("DCT Abu Dhabi") announced plans to makeAbu Dhabi the next Sphere location under a franchise model; - The Company announced new multi-year marketing partnerships with Verizon and DCT Abu Dhabi;
- V-U2 An Immersive Concert Film debuted in September, joining Postcard from Earth as the second Sphere Experience;
- The Eagles are in the midst of a 28-show residency, which has been extended multiple times due to demand;
- In September, Sphere hosted its first live sports event – UFC 306 – which became the highest single grossing event at the venue so far; and
- Delta Air Lines recently announced it will hold a keynote presentation at Sphere in
Las Vegas during the Consumer Electronics Show in January 2025.
In addition, last month, MSG Networks began 2024-25 regular season coverage of its five NBA and NHL professional sports teams. Concurrent with the start of the seasons, Gotham Advanced Media and Entertainment (GAME), the digital joint venture between MSG Networks and the YES Network, launched The Gotham Sports App, the new direct-to-consumer and authenticated streaming home of each programming service.
For the fiscal 2025 first quarter, the Company reported revenues of
Executive Chairman and CEO James L. Dolan said, "The vision for Sphere has always included a global network of venues, and our recently announced plans for a second Sphere in
Segment Results for the Three Months Ended September 30, 2024 and 2023:
(In millions) | Three Months Ended | |||||||
September 30, | Change | |||||||
2024 | 2023 | $ | % | |||||
Revenues: | ||||||||
Sphere | $ 127.1 | $ 7.8 | $ 119.3 | NM | ||||
MSG Networks | 100.8 | 110.2 | (9.4) | (9) % | ||||
Total Revenues | $ 227.9 | $ 118.0 | $ 109.9 | 93 % | ||||
Operating Income (Loss) | ||||||||
Sphere | $ (125.1) | $ (98.4) | $ (26.6) | (27) % | ||||
MSG Networks | 7.5 | 28.7 | (21.2) | (74) % | ||||
Total Operating Loss | $ (117.6) | $ (69.8) | $ (47.8) | (69) % | ||||
Adjusted Operating Income (Loss):(1) | ||||||||
Sphere | $ (26.3) | $ (83.1) | $ 56.8 | 68 % | ||||
MSG Networks | 16.1 | 25.2 | (9.1) | (36) % | ||||
Total Adjusted Operating Loss | $ (10.2) | $ (57.9) | $ 47.7 | 82 % | ||||
Note: Does not foot due to rounding. NM — Absolute percentages greater than | |
(1) | See page 4 of this earnings release for the definition of adjusted operating income (loss) included in the discussion of non-GAAP financial measures. |
Sphere
On September 29, 2023, the Company opened Sphere in
For the fiscal 2025 first quarter, the Sphere segment reported revenues of
For the fiscal 2025 first quarter, the Sphere segment had direct operating expenses of
Fiscal 2025 first quarter selling, general and administrative expenses of
Fiscal 2025 first quarter operating loss of
MSG Networks
For the fiscal 2025 first quarter, the MSG Networks segment reported total revenues of
Distribution revenue decreased
As a result of the launch of MSG+ in June 2023, distribution revenue now includes both affiliation fee revenue earned from MSG Networks' distributors for the right to carry the Company's networks as well as revenue earned from subscriptions and single game purchases on MSG+ (which is now included in the Gotham Sports streaming product launched as part of MSG Networks' joint venture with YES Network). In addition, total subscribers includes both affiliate subscribers as well as monthly and annual subscribers of MSG+.
Fiscal 2025 first quarter direct operating expenses of
Fiscal 2025 first quarter selling, general and administrative expenses of
Fiscal 2025 first quarter operating income of
Other Matters
MSG Networks continues to pursue a refinancing of its credit facilities through a work-out with its syndicate of lenders. As of September 30, 2024, MSG Networks had approximately
About Sphere Entertainment Co.
Sphere Entertainment Co. is a premier live entertainment and media company. The Company includes Sphere, a next-generation entertainment medium powered by cutting-edge technologies to redefine the future of entertainment. The first Sphere venue opened in
Non-GAAP Financial Measures
We define adjusted operating income (loss), which is a non-GAAP financial measure, as operating income (loss) before (i) depreciation, amortization and impairments of property and equipment, goodwill and intangible assets, (ii) amortization for capitalized cloud computing arrangement costs, (iii) share-based compensation expense or benefit, (iv) restructuring charges or credits, (v) merger, debt work-out and acquisition-related costs, including merger-related litigation expenses, (vi) gains or losses on sales or dispositions of businesses and associated settlements, (vii) the impact of purchase accounting adjustments related to business acquisitions, and (ix) gains and losses related to the remeasurement of liabilities under the Company's Executive Deferred Compensation Plan. We believe that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of our business without regard to the settlement of an obligation that is not expected to be made in cash. We eliminate merger, debt work-out and acquisition-related costs, when applicable, because the Company does not consider such costs to be indicative of the ongoing operating performance of the Company as they result from an event that is of a non-recurring nature, thereby enhancing comparability. In addition, management believes that the exclusion of gains and losses related to the remeasurement of liabilities under the Company's Executive Deferred Compensation Plan, provides investors with a clearer picture of the Company's operating performance given that, in accordance with
We believe adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of our business segments and the Company on a consolidated basis. Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze our performance. Internally, we use revenues and adjusted operating income (loss) as the most important indicators of our business performance, and evaluate management's effectiveness with specific reference to these indicators. Adjusted operating income (loss) should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP. Since adjusted operating income (loss) is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies. For a reconciliation of operating income (loss) to adjusted operating income (loss), please see page 6 of this release.
Forward-Looking Statements
This press release may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results, developments or events may differ materially from those in the forward-looking statements as a result of various factors, including financial community perceptions of the Company and its business, operations, financial condition and the industries in which it operates and the factors described in the Company's filings with the Securities and Exchange Commission, including the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained therein. The Company disclaims any obligation to update any forward-looking statements contained herein.
Contacts:
Ari Danes,CFA Investor Relations and Financial Communications (212) 465-6072 | Justin Blaber Financial Communications (212) 465-6109 |
Grace Kaminer Investor Relations (212) 631-5076 |
Conference Call Information:
The conference call will be Webcast live today at 10:00 a.m. ET at investor.sphereentertainmentco.com
Conference call dial-in number is 888-800-3155 / Conference ID Number 8089430
Conference call replay number is 800-770-2030 / Conference ID Number 8089430 until November 19, 2024
SPHERE ENTERTAINMENT CO. | ||||
Three Months Ended | ||||
September 30, | ||||
2024 | 2023 | |||
Revenues | $ 227,913 | $ 118,007 | ||
Direct operating expenses | (139,696) | (84,499) | ||
Selling, general, and administrative expenses | (118,977) | (87,144) | ||
Depreciation and amortization | (81,913) | (14,259) | ||
Impairment and other (losses) gains, net | (4,033) | 1,497 | ||
Restructuring charges | (913) | (3,391) | ||
Operating loss | (117,619) | (69,789) | ||
Other income (expense): | ||||
Interest income | 7,039 | 4,378 | ||
Interest expense | (26,974) | — | ||
Other (expense) income, net | (695) | 42,196 | ||
Loss from continuing operations before income taxes | (138,249) | (23,215) | ||
Income tax benefit | 32,966 | 90,287 | ||
(Loss) income from continuing operations | (105,283) | 67,072 | ||
Loss from discontinued operations, net of taxes | — | (647) | ||
Net (loss) income | (105,283) | 66,425 | ||
Basic (loss) earnings per common share | ||||
Continuing operations | $ (2.95) | $ 1.92 | ||
Discontinued operations | $ — | $ (0.02) | ||
Basic (loss) earnings per common share attributable to Sphere Entertainment Co.'s stockholders | $ (2.95) | $ 1.90 | ||
Diluted (loss) earnings per common share | ||||
Continuing operations | $ (2.95) | $ 1.90 | ||
Discontinued operations | $ — | $ (0.01) | ||
Diluted (loss) earnings per common share attributable to Sphere Entertainment Co.'s | $ (2.95) | $ 1.89 | ||
Weighted-average number of common shares outstanding: | ||||
Basic | 35,663 | 34,911 | ||
Diluted | 35,663 | 35,226 | ||
SPHERE ENTERTAINMENT CO.
ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO
ADJUSTED OPERATING INCOME (LOSS)
(In thousands)
(Unaudited)
The following is a description of the adjustments to operating loss in arriving at adjusted operating loss as described in this earnings release:
- Share-based compensation. This adjustment eliminates the compensation expense relating to restricted stock units, performance stock units and stock options granted under the Sphere Entertainment Employee Stock Plan, MSG Sports Employee Stock Plan, MSG Networks Employee Stock Plan, as amended and assumed by Sphere Entertainment, and Sphere Entertainment Non-Employee Director Plan.
- Depreciation and amortization. This adjustment eliminates depreciation and amortization of property and equipment and intangible assets in all periods.
- Restructuring charges. This adjustment eliminates costs related to termination benefits provided to certain executives and employees.
- Impairment and other losses (gains), net. This adjustment eliminates non-cash impairment charges and the impact of gains or losses from the disposition of assets or businesses in all periods.
- Merger, debt work-out, and acquisition related costs. This adjustment eliminates costs related to mergers, debt work-outs and acquisitions, including merger-related litigation expenses and litigation-related insurance recoveries, in all periods.
- Amortization for capitalized cloud computing arrangement costs. This adjustment eliminates amortization of capitalized cloud computing arrangement costs.
- Remeasurement of deferred compensation plan liabilities. This adjustment eliminates the impact of gains and losses related to the remeasurement of liabilities under the Company's executive deferred compensation plan.
Three Months Ended | ||||
September 30, | ||||
2024 | 2023 | |||
Operating loss | $ (117,619) | $ (69,789) | ||
Share-based compensation | 15,567 | 4,883 | ||
Depreciation and amortization | 81,913 | 14,259 | ||
Restructuring charges | 913 | 3,391 | ||
Impairment and other losses (gains), net | 4,033 | (1,497) | ||
Merger, debt work-out, and acquisition related costs, net of insurance recoveries | 4,820 | (9,043) | ||
Amortization for capitalized cloud computing arrangement costs | 22 | 22 | ||
Loss (gain) on remeasurement of deferred compensation plan liabilities | 157 | (107) | ||
Adjusted operating loss | $ (10,194) | $ (57,881) | ||
SPHERE ENTERTAINMENT CO. | ||||||
BUSINESS SEGMENT RESULTS | ||||||
Three Months Ended September 30, 2024 | ||||||
Sphere | MSG | Total | ||||
Revenues | $ 127,072 | $ 100,841 | $ 227,913 | |||
Direct operating expenses | (62,449) | (77,247) | (139,696) | |||
Selling, general and administrative expenses | (104,950) | (14,027) | (118,977) | |||
Depreciation and amortization | (79,838) | (2,075) | (81,913) | |||
Impairment and other losses, net | (4,033) | — | (4,033) | |||
Restructuring charges | (883) | (30) | (913) | |||
Operating (loss) income | $ (125,081) | $ 7,462 | $ (117,619) | |||
Reconciliation to adjusted operating (loss) income: | ||||||
Share-based compensation | 13,180 | 2,387 | 15,567 | |||
Depreciation and amortization | 79,838 | 2,075 | 81,913 | |||
Restructuring charges | 883 | 30 | 913 | |||
Impairment and other losses, net | 4,033 | — | 4,033 | |||
Merger, debt work-out, and acquisition related costs, net of | 692 | 4,128 | 4,820 | |||
Amortization for capitalized cloud computing arrangement costs | — | 22 | 22 | |||
Loss on remeasurement of deferred compensation plan liabilities | 157 | — | 157 | |||
Adjusted operating (loss) income | $ (26,298) | $ 16,104 | $ (10,194) | |||
Three Months Ended September 30, 2023 | ||||||
Sphere | MSG | Total | ||||
Revenues | $ 7,779 | $ 110,228 | $ 118,007 | |||
Direct operating expenses | (7,805) | (76,694) | (84,499) | |||
Selling, general and administrative expenses | (84,150) | (2,994) | (87,144) | |||
Depreciation and amortization | (12,377) | (1,882) | (14,259) | |||
Other gains, net | 1,497 | — | 1,497 | |||
Restructuring charges | (3,391) | — | (3,391) | |||
Operating (loss) income | $ (98,447) | $ 28,658 | $ (69,789) | |||
Reconciliation to adjusted operating (loss) income: | ||||||
Share-based compensation | 3,919 | 964 | 4,883 | |||
Depreciation and amortization | 12,377 | 1,882 | 14,259 | |||
Restructuring charges | 3,391 | — | 3,391 | |||
Other gains, net | (1,497) | — | (1,497) | |||
Merger, debt work-out, and acquisition related costs, net of | (2,702) | (6,341) | (9,043) | |||
Amortization for capitalized cloud computing arrangement costs | — | 22 | 22 | |||
Gain on remeasurement of deferred compensation plan liabilities | $ (107) | $ — | $ (107) | |||
Adjusted operating (loss) income | $ (83,066) | $ 25,185 | $ (57,881) | |||
SPHERE ENTERTAINMENT CO. | ||||
September 30, | June 30, | |||
2024 | 2024 | |||
ASSETS | ||||
Current Assets: | ||||
Cash, cash equivalents, and restricted cash | $ 553,217 | $ 573,233 | ||
Accounts receivable, net | 114,645 | 228,230 | ||
Related party receivables, current | 12,102 | 9,377 | ||
Prepaid expenses and other current assets | 56,087 | 54,855 | ||
Total current assets | 736,051 | 865,695 | ||
Non-Current Assets: | ||||
Investments | 31,395 | 30,728 | ||
Property and equipment, net | 3,092,449 | 3,158,420 | ||
Right-of-use lease assets | 103,227 | 106,468 | ||
Goodwill | 470,152 | 470,152 | ||
Intangible assets, net | 30,141 | 31,940 | ||
Other non-current assets | 129,254 | 124,489 | ||
Total assets | $ 4,592,669 | $ 4,787,892 | ||
LIABILITIES AND EQUITY | ||||
Current Liabilities: | ||||
Accounts payable, accrued and other current liabilities | $ 371,877 | $ 417,087 | ||
Related party payables, current | 10,180 | 8,200 | ||
Current portion of long-term debt, net | 829,091 | 849,437 | ||
Operating lease liabilities, current | 20,763 | 18,548 | ||
Deferred revenue | 83,515 | 80,404 | ||
Total current liabilities | 1,315,426 | 1,373,676 | ||
Non-Current Liabilities: | ||||
Long-term debt, net | 523,420 | 522,735 | ||
Operating lease liabilities, non-current | 124,806 | 128,022 | ||
Deferred tax liabilities, net | 192,588 | 225,169 | ||
Other non-current liabilities | 122,255 | 122,738 | ||
Total liabilities | 2,278,495 | 2,372,340 | ||
Commitments and contingencies | ||||
Equity: | ||||
Class A Common Stock (1) | 289 | 285 | ||
Class B Common Stock (2) | 69 | 69 | ||
Additional paid-in capital | 2,411,769 | 2,410,378 | ||
(Accumulated deficit) retained earnings | (93,896) | 11,387 | ||
Accumulated other comprehensive loss | (4,057) | (6,567) | ||
Total stockholders' equity | 2,314,174 | 2,415,552 | ||
Total liabilities and equity | $ 4,592,669 | $ 4,787,892 | ||
_________________ | |
(1) | Class A Common Stock, |
(2) | Class B Common Stock, |
SPHERE ENTERTAINMENT CO. | ||||
Three Months Ended | ||||
September 30, | ||||
2024 | 2023 | |||
Net cash provided by (used in) operating activities | $ 34,094 | $ (94,641) | ||
Net cash (used in) provided by investing activities | (19,586) | 66,498 | ||
Net cash (used in) provided by financing activities | (35,622) | 50,854 | ||
Effect of exchange rates on cash, cash equivalents, and restricted cash | 1,098 | (83) | ||
Net (decrease) increase in cash, cash equivalents, and restricted cash | (20,016) | 22,628 | ||
Cash, cash equivalents, and restricted cash at beginning of period | 573,233 | 429,114 | ||
Cash, cash equivalents, and restricted cash at end of period | $ 553,217 | $ 451,742 | ||
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SOURCE Sphere Entertainment Co.
FAQ
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